Renault and Mahindra, Indias fourth largest carmaker, have formed a joint venture to build the no-frills Logan family car for the Indian market starting in 2007.
The project is expected to cost E125 million for a production capacity of 50,000 cars a year, Renault said. The new company, called Mahindra Renault Ltd., is 51 percent owned by Mahindra and 49 percent by Renault.
Renault did not say where the capacity would be installed. Indian auto industry sources have told Automotive News Europe the Logan would probably be built in Mahindras plant in Nashik, north of Bombay.
The announcement comes just days after Renault Chairman Louis Schweitzer raised the Logans sales target to 1 million units a year by 2010 from a previous objective of 700,000.
Renault said that from the very start of the project 50 percent of the suppliers of the Indian-built Logan would be local. Mahindra Renault will build a right-hand drive version of the Logan destined for India and other right-hand-drive countries.
The car will be sold under the Mahindra Renault brand by the Mahindra dealer network.
– Staff report